WASHINGTON, D.C.— Dennis M. Kelleher, President and CEO, issued the following statement on the release of an article titled “Democratizing Equity Markets With And Without Exploitation: Robinhood, Gamestop, Hedge Funds, Gamification, High-Frequency Trading, And More,” authored by Better Markets staff in the Western New England Law Review:
“Wall Street has been too exclusive, expensive, opaque, and complicated for way too long. The closed nature of Wall Street has presented an opening for upstart firms to pitch Main Street investors, claiming that they are going to ‘democratize’ our financial system, with easy access to stock market riches and less expensive, if not free, financial products and services. These claims are often just a cover for manipulation and exploitation, and in the case of Robinhood, use slick marketing, predatory app features, hip/cool logos, and a legendary name to disguise the owners’ get-rich-quick schemes.
“Equity markets and finance overall can be genuinely ‘democratized’ (meaning lower costs, easier access, a more delightful experience, etc.) without exploitation, manipulation, and predatory profiting at the expense of retail investors. What Main Street investors need is a modern-day Robin Hood who doesn’t take from the rich to give to the poor, but provides Main Street investors real opportunities to trade, invest, and build wealth in the equity markets. That democratization can be – and must be — done without exploitation.
“True democratization means making it easier for Main Street Americans to actually make money in the stock market. This can be possible for retail investors, but it is unlikely if they engage in the frequent trading strategy of Robinhood and other platforms that use predatory practices.”
Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.